[Today's Guide]
○ Four ministries and commissions specify target for charging pile construction, market to see huge growth
○ Many countries pledge more efforts in UAVs, China to introduce cyber security law
○ Century Real Technology to acquire Yiweixun Information Technology with premium, Tellhow Sci-tech to fully control Beyond IT
○ Splendor Science ＆ Technology's related parties to fully subscribe private placement, Jingu to expand automotive aftermarket
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[SSN Focus]
○ Four ministries and commissions specify target for charging pile construction, market to see huge growth
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The National Development and Reform Commission (NDRC), the National Energy Administration (NEA), the Ministry of Industry and Information Technology (MIIT) and the Ministry of Housing and Urban-Rural Development (MHURD) jointly published the guidance on the development of charging infrastructure for electric vehicles (2015-2020) on Nov. 17, which proposes to undertake advance construction of charging infrastructure according to the principle of "build charging piles and stations first", and strive to realize the goal of construct over 4.8 million decentralized charging piles to meet the charging demand of 5 million electric vehicles by 2020.
Comment: So far there exists in the electric vehicle industry a common problem that more attentions are paid to electric vehicles, and the charging infrastructure is neglected. By the end of last year, China has constructed altogether 31,000 AC/DC charging piles, which could serve 120,000 electric vehicles. According to above target, the number of charging piles will see three-digit growth in the coming years, and thus may effectively ease the drivers' "anxiety on mileage". Among listed companies in A share market, Hangzhou Zhongheng Electric Co., Ltd. (002364.SZ) has won biddings for several times in State Grid's charging equipment procurements; Suzhou Industrial Park Heshun Electric Co., Ltd. (300141.SZ) expected to record sales revenue of nearly 100 million yuan this year; Shenzhen Clou Electronics Co., Ltd. (002121.SZ) has set foot in charging network intelligent cloud platform through controlling CLP Luyuan New Energy Automobile Co., Ltd.
[SSN Selection]
○ Premier Li Keqiang on Nov. 17 hosted the working conference on compiling the program planning for the 13th five-year plan. The premier emphasized the implementation of the ideas of innovation, coordination, green development, opening and sharing, and brought forward a series of significant policies and measures serving such ideas.
○ Fang Xinghai, vice chairman of China Securities Regulatory Commission (CSRC), indicated on the first anniversary of Shanghai-Hong Kong Stock Connect program that target for the next stage is to expand trading limit and the range of subject matters.
○ The number of newly increased investors reached a new high since August, and the proportion of active trading accounts has risen to 26.59 percent from 24.62 percent a week before.
○ Bird's Nest and LeTV Sports and Culture Industry Fund was established on Nov. 17. The 5 billion yuan fund is the first fund in the industry participated by state owned capital.
○ Data on US stocks positions shows that in the third quarter, various well known fund managers have bought healthcare stocks, including pharmaceuticals and pharmaceutical distribution stocks.
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[Industry Information]
○Many countries pledge more efforts in UAVs, China's market demand to reach RMB100 bln
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Foreign media reported that British Prime Minister David Cameron indicated on Nov. 17 that the increase in the military budget will give priority to the development of unmanned aerial vehicles (UAVs). The U.S. army has set the target that "one quarter of the overall combat effectiveness will come from UAVs by 2020". The Ministry of Defense of Russia discussed the development of underwater UAVs carried by submarines at its regular meeting. As for the civil sector, Dajiang Innovations Technology Co., Ltd. (DJI) announced that it will follow the physical stores of Apple Inc. (NASDAQ: AAPL) and will open its first flagship store in Shenzhen next month.
Comment: Institutes estimate that the market demand for military UAVs will reach nearly 200 billion yuan in the following 15 years. The demand for professional UAVs for civil use will exceed 100 billion yuan and the demand for UAVs for civil consumption (domestic demand) will reach over 30 billion yuan. Among listed companies, Changzhou Haijie Metallurgy and Machinery Manufacturing Co., Ltd., a subsidiary of Tongyu Heavy Industry Co., Ltd. (300185.SZ), has received its first order for UAVs last August. Shandong Mining Machinery Group Co., Ltd. (002526.SZ) proposes to raise 460 million yuan by issuing shares through private placements to invest in UAVs projects. Shenzhen Manta Intelligent Technology Co., Ltd., a subsidiary under CNLIGHT Co., Ltd. (002076.SZ), has achieved mass production for UAVs.
○ China to advance national security strategy, cyber security law to speed in introducing
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Meng Jianzhu, head of the Commission for Political and Legal Affairs of the CPC Central Committee, pointed out in an article published on People's Daily on Nov. 17 that China should establish a legal system on national security and promote the introduction of anti-terrorism law, cyber security law and other laws and regulations. It is emphasized in the article that it should further specify the guidelines on national security strategies, the medium- and long-term targets and national security policies in key areas in the implementation of national security strategies.
Comment: The current input in cyber security accounts for only about 2 percent in the whole IT industry in China, which is far below the 10 percent in European and American countries. It enjoys a potential of 100 billion yuan. In terms of A-share listed companies, Beijing TRS Information Technology Co., Ltd. (300229.SZ) is developing the exchange and treatment of security data through the acquisition of Beijing Topwalk Information Technology Co., Ltd. Beijing VRV Software Corporation Limited (300352.SZ) is quite competitive in terminal security and data security product markets and proposes to increase the input in instant communication security industry.
[Companies Hotspot]
○ Yinbang Clad Material to obtain military confidentiality qualification within year
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SSN learnt that Yinbang Clad Material Co., Ltd. (300337.SZ) is applying for the level 3 military confidentiality qualification and is expected to obtain within the year, which will lay foundation for entering ancillary military engineering system. The company has established strategic partnership with China Armor Science and Engineering Institute and China Shipbuilding Industry Corporation in the research and development of light metal armor composites and marine equipment. The development of military industry will bring more market opportunities to Yinbang Clad Material.
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[Announcement Interpretation]
○ Century Real Technology plans private placement at premium to acquire Yiweixun Information Technology with RMB319 mln
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Beijing Century Real Technology Co., Ltd. (300150.SZ) proposes to acquire 66.5 percent equities of Suzhou Yiweixun Information Technology Co., Ltd., which is priced at 319 million yuan, by issuing shares at 12.49 yuan per share through private placement and payment in cash. The company will hold 96.5 percent equities of Yiweixun Information Technology after the transaction. Yiweixun Information Technology is a service provider for the operation of railway customer service system. It committed that its net profit from 2015 to 2017 will be 40 million yuan, 50 million yuan and 60 million yuan, respectively. Century Real Technology closed at 11.95 yuan before trading suspension.
○ Tellhow Sci-tech to fully control Beyond IT with RMB638 mln
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Tellhow Sci-tech Co., Ltd. (600590.SH) intends to acquire 95.22 percent equities of Shanghai Beyond IT Service Management Co., Ltd. with 638 million yuan. Based on the issue price of 13.37 yuan per share, it shall issue 47.72 million shares through private placement. Besides, the company plans to raise a supporting fund of 300 million yuan by issuing shares to certain objects, including its substantial shareholder Tellhow Group, at the same price through private placement. Beyond IT is principally engaged in the IT services in the power industry with State Grid Corporation of China as its major client, which is complementary with the company. Based on the performance commitment, its net profits after extraordinary items from 2015 to 2020 will be no less than 35 million yuan, 55 million yuan, 71.5 million yuan, 92.95 million yuan, 107 million yuan and 123 million yuan, respectively.
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○Splendor Science ＆ Technology to invest over RMB1 bln in traffic WIFI R＆D, chairman to fully subscribe with mother
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Henan Splendor Science ＆ Technology Co., Ltd. (002296.SZ) plans to raise 1,020 million yuan by issuing 68.50 million shares at 14.89 yuan per share through private placement to Li Haiying, the biggest shareholder and chairman of the company, and Yuan Yaqin, Li's mother. 800 million yuan of the proceeds will be invested in the construction of its traffic WIFI R＆D center and 200 million yuan will supplement its working capital. The company currently has no actual controllers. Li and Yuan, one the persons acting in concert with Li, will totally hold 28.34 percent of the shares. Li will hold 20.06 percent shares as the actual controller of the company.
○ Jingu invests RMB 2.7bln to expand automotive aftermarket
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Zhejiang Jingu Co., Ltd. (002488.SZ) plans to raise 2.7 billion yuan by issuing 134,950,000 shares at a price of no more than 20.01 yuan per share through private placement to invest in the construction of automotive aftermarket O2O platform. The shares will be issued to specific client asset management plans of Caitong Asset-Jingu senior management and Shenzhen Anpeng Automotive Aftermarket Fund.
○ Hongbo invests heavily in lottery intelligentization
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Hongbo Co., Ltd. (002229.SZ) plans to raise 930 million yuan at a price of no more than 19.42 yuan per share through private placement for the acquisition of 40 percent equities of Wuxi Solong Information Paper Co., Ltd., the intelligent management and application of Internet of things in lottery, the research and development center of electronic lottery and the supplementary to working capital. You Youyun, the actual controller of the company, will subscribe shares. In addition, the company will take 100 percent equities of Beijing Kexin Shengcai Investment Co., Ltd. with over 200 million yuan. The latter holds 51 percent equities in Beijing Zhongke Lottery Technology Co., Ltd. which is mainly engaged in printing of instant sports lottery.
○ JSTI raises fund through private placement, actual controllers involved
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JSTI Group (300284.SZ) plans to raise 1.0 billion yuan at 19.81 yuan per share through private placement to supplement working capital. The shares will be issued to the No. 7 and 8 asset management plans through private placement of Liu'an Xinshi Equity Investment Fund, Taicang Mingyuan Investment Center, Ningbo Xiehui Investment Co., Ltd. Li Wei and China Fund Management Co., Ltd. The contributors of the No. 7 and 8 asset management plans through private placement are Fu Guanghua and Wang Junhua, the actual controller of JSTI.
○ Shenwu Environmental Technology signs big deal
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Shenwu Xinjiang Co., Ltd., a wholly-owned subsidiary of Shenwu Environmental Technology Co., Ltd. (300284.SZ) signed an EPC contract with Xinjiang Bolituo Mining Co., Ltd. on a 5?600t/d lime kiln projects. The total contract price is 468 million yuan, accounting for 155 percent of the company's audited operating revenue in 2014.
[Trading Trends]
○ Five institutes buy Xinyuan Germanium Industry
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The trading volume ranking list on Nov. 17 shows that four institutional seats bought Yunnan Lincang Xinyuan Germanium Industry Co., Ltd. (002428.SZ) with 337 million yuan, accounting for 35.43 percent of its intraday turnover. No institutional seat sold it.
Comment: Institutes previously pointed out that the company is the only listed company that owns the entire germanium industrial chain in China as well as the top germanium seller in China. As the company has sought to make technical breakthroughs through various channels and expand its industrial chain, it is estimated that weaponry-related orders are expected to become new driver for the company's profit growth.
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